Carpe Diem

Rx:1,500 Market-based Retail Health Clinics in 2008

ASSOCIATED PRESSWal-Mart Stores Inc. will open its first in-store medical clinics under its own brand name after leasing space in dozens of stores to outside companies that operate the quick-service health stops.

The world’s largest retailer said Thursday it will open “The Clinic at Wal-Mart” (pictured above) as a joint venture with local hospital systems in Atlanta, Dallas and Little Rock, Ark., starting in April.

Bentonville, Ark.-based Wal-Mart is among several U.S. supermarket and drug store chains that in the past couple of years have begun opening store-based health clinics, which are staffed mostly by nurse practitioners or physician assistants and offer quick service for routine conditions from colds and bladder infections to sunburn.

About 7% of Americans have tried a clinic at least once, and t
hat number is expected to increase dramatically, as chains like Wal-Mart, CVS Corp., Target Corp. and Walgreen Co. partner with mini-clinic providers like RediClinic and MinuteClinic to expand operations. The trade group estimates there will be more than 1,500 by year-end, up from about 800 in November.

Wal-Mart’s press release: Today’s announcement is the first step towards opening 400 co-branded convenient clinics by 2010 and further proof of Wal-Mart’s commitment to providing affordable, accessible solutions to America’s healthcare challenges. Wal-Mart expects “The Clinic at Wal-Mart” to become synonymous with quality healthcare at affordable prices, provided by trusted, local providers.
Carpe Diem

Rx: Market Competition. Exhibit A: Inflation Rate for Prescription Drugs at 34-Year Low of 1.4%

Partly due to increasing generic-drug competition (generics were 63% of all prescriptions in 2006 vs. 50% in 2005) and the ongoing, fierce price war among drug retailers (see previous CD posts about $4 prescription drugs at Wal-Mart, Kmart, Publix, and Kroger), the inflation rate for prescription drugs fell to a 34-year low of 1.4% in 2007 (see graph above, click to enlarge), way below the average annual inflation rate of 4.12% for 2007, and way below the 34-year average drug inflation rate of 6.28%.

“The decline in drug prices shows that when things go right in health care — when competitive markets are allowed to function — prices respond favorably for consumers, just as they do in other sectors of the economy. So while politicians and pundits in Washington dream up the next grandiose health care reform, smart consumers know that the most effective health care solutions may be right around the corner at their local retailer.”

Robert Goldberg, Vice-president of the Center for Medicine in the Public Interest

Carpe Diem

Being Alive Today in US, You’ve Won Lottery of Life

A previous CD post documented the significant gains in real income (not counting fringe benefits) over just a single generation (for ALL income groups), based on a sample of individuals who were between the ages of 0 and 18 in 1968 and have been tracked into adulthood.

Another important financial gain over that same generation from the late 1960s to the late 1990s was the significant increase in real net household wealth from about $159,000 per household in 1969 to $452,000 by 1999 (according to data from the Federal Reserve, adjusted for inflation using the CPI). In other words, at the same time that real median household income rose by 29% between the two generations, average real household net worth almost tripled!
Carpe Diem

Waiting Times: 40% of Swedes In One County Can’t Even Contact Their Local Clinic By Phone When Ill

SWEDENHealth Minister Göran Hägglund publicly criticized the lack of progress made toward shortening wait times in Sweden’s health system.

He made the comments in an opinion article in which he stated that the $39 million spent by the government on lowering wait times has apparently had little effect. The criticism comes in response to a report by the National Board of Health and Welfare showing that nearly 45% of patients have longer wait times than are supposedly guaranteed by the healthcare system.

Wait times for service were also found to vary greatly from one county to another. In Jämtland county, for example, four out of ten patients couldn’t even get through to their local clinic by telephone on the day they become ill.

Just wondering: How long would Domino’s Pizza, Northwest Airlines or Dell Computer stay in business if four out of ten customers couldn’t get through by phone when they wanted to order a pizza, an airline ticket or a computer?

Carpe Diem

If Detroit’s Mayor Were a CEO, He’d Be Fired

Q: What would happen if Detroit Mayor Kwame Kilpatrick, who is accused of having an affair with his chief of staff and lying about it under oath, were the chief executive of a major corporation or nonprofit group instead of the mayor of Detroit?

A: His fate would be a foregone conclusion. He’d be fired. (I think we could say the same for Monica Lewinsky’s ex-boyfriend.)

Read more here of University of Michigan’s David Hess’ (Ross School professor of business ethics) editorial in the Detroit News

Bottom Line: Isn’t it interesting that the private sector now has higher ethical standards for its CEOs than the public sector has for its highest elected officials?

Carpe Diem

The Real Scandal: How Feds Invited Mortgage Mess

Countrywide Financial heads towards bankruptcy

Thomas Sowell, on the subprime credit crisis:

The government has brought on the housing problem, partly by these very low interest rates, which encouraged many people to go way out on a limb. They’ve brought it on by highly restrictive building policies, which have caused housing prices to skyrocket artificially. And they’ve brought it on by the Community Reinvestment Act, which presumes that politicians are better able to tell investors where to put their money than the investors themselves are. When you put all that together, you get something like what you have.

Stan Liebowitz, Professor of Economics, University of Texas at Dallas, writing in yesterday’s NY Post:

Perhaps the greatest scandal of the mort gage crisis is that it is a direct result of an intentional loosening of underwriting standards – done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.

From the current hand-wringing, you’d think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards – at the behest of community groups and “progressive” political forces.

A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.

Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed “the most flexible underwriting criteria permitted.” That lender’s $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.

Who was that virtuous lender? Why – Countrywide, the nation’s largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy (see chart above of Countrywide’s 90% stock decline).

Carpe Diem

Living Large: America’s Prosperous Middle Class To hear the Lou Dobbses and Bill O’Reillys of the world–not to mention politicians ranging from Ron Paul to Hillary Clinton–the middle class of America (however you define that term) has never had it so tough. Between credit squeezes, out-of-control immigration, rising costs of education and health care and everything else, it’s all darkness out there for those of us who are neither millionaires nor welfare cases, right?

In “Living Large,” Drew Carey and examine the plight of the American middle class. What do they find? Click here to watch the video.

Featured in the video is Michael Cox, chief economist at the Federal Reserve Bank of Dallas. On the topic of the middle class making ends meet Cox says, “If you’re willing to settle for the living standards of the 1970s, it’s easy to make ends meet. It’s not the high cost of living, it’s the cost of living high, and it’s the fact that we insist on having so much more today.” Further, “Americans are richer today than at any time in history. We should really be thankful that we live in a society where we don’t have to work day and night in order just to eke out a living.”

Despite what Lou Dobbs and the media tell us, just by being alive in 21st century America, even if you’re middle class, you’ve “won first prize in the lottery of life.”

Carpe Diem

Rich Are Getting Richer, Poor Are Getting Richer

Let’s Permanently Dismiss the “Stagnant Wage Myth”: ALL income groups have gotten richer in a generation:
2 of Every 3 Americans Are Better Off Today Than Their Parents, and More Than 80% of the Bottom Fifth Are Richer Than Their Parents
The charts above are from the study “Economic Mobility of Families Across Generations” from the Economic Mobility Project, based on a sample of 2,367 individuals who were between the ages of 0 and 18 in 1968 and have been tracked into adulthood. Here is what the study shows:

1. Adults who were children in 1968—those who were in their 30s and 40s at the end of the century—have more income than did their parents’ generation.

Median family income rose by 29% between the two generations, from $55,600 in inflation-adjusted dollars to $71,900. Average family incomes, grew even more rapidly, from $61,600 to $88,000 (a 43% increase). Income growth occurred throughout the income distribution for all five quintiles, as shown in the top chart above (click to enlarge), although family income in the top quintile grew by 52%, compared to 18% for the bottom fifth.

2. The average number of individuals per family shrank from 3.1 to 2.3 individuals between 1969 and 1998. Taking into account the smaller family size as well as the growth in family income, families are generally better off economically today.

3. More than 2 out of every 3 Americans who were children in 1968 had higher levels of real family income in 1995–2002 than their parents had in 1967–1971 (see bottom chart above, click to enlarge). Children born to parents in the bottom fifth were MORE likely to surpass their parents’ income than children from any other background. More than four out of five children (82%) born to parents in the bottom quintile have greater family income than their parents. In contrast, less than half (43%) of those whose parents are in the top fifth of income surpass their parents.
4. Economic mobility is measured in this study by tracking only changes in cash income. Income mobility would be higher at the top income quintiles with the inclusion of the value of fringe benefits, since employer contributions to retirement and health insurance totaled 7% of wages in 1967–1971 (parents’ generation) and 13% in 1995–2002 (children’s generation).
In other words, contrary to the picture portrayed by the media:
1. Real incomes are NOT stagnant – real median family income has increased by 29% over the last quarter century, and real incomes have increased for ALL income groups over the last generation.

2. The middle class has not disappeared, it’s gotten richer! Real income of the middle quintile (middle class) has increased by 29%.

3. Although it’s true that income inequality has increased, it doesn’t really matter because the poor have gotten richer AND the rich have gotten richer. The rich have NOT gotten richer at the expense of the poor, all groups have gotten richer together.

4. There is significant upward income mobility, especially for the lowest income group. Children born to parents in the bottom quintile are more likely to surpass their parents’ income (82%) than are children from any other background.
Bottom Line: It’s truly remarkable and extraordinary that more than 2 of every 3 Americans born a generation ago have already surpassed their parents’ income, and more than 4 of every 5 Americans born to parents in the bottom fifth during the late 1960s and early 1970s are better off than their parents. Do you think that was ever the case at any other time in history like the 5th Century, 10th Century or 15th Century? Not likely. It’s probably true that just being alive in the 21st Century, especially being alive in the U.S., you’ve “won first prize in the lottery of life.”